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Tiffany takeover talk nudges consumer discretionary stocks up 0.3% in October

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Tiffany takeover talk nudges consumer discretionary stocks up 0.3% in October

The S&P 500 Consumer Discretionary index produced a gain of 0.3% in October, compared to the 2.2% increase in the overall S&P 500 index, according to data compiled by S&P Global Market Intelligence.

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Two of the five biggest risers in the S&P 500 index were consumer discretionary companies: Tiffany & Co. and Leggett & Platt Inc.

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Tiffany posted a gain of 34.4% in October, making it the best performer in the sector and the second-best in the overall S&P 500 index. Shares of the jewelry-maker soared 30% to a 52-week high of $130.40 on Oct. 28 after the company confirmed reports that it received a takeover offer from luxury goods giant LVMH Moët Hennessy - Louis Vuitton SE. The proposed deal, which would value Tiffany at about $14.5 billion, is expected to be one of the largest consumer M&A deals of 2019.

Home furnishings producer Legget & Platt followed Tiffany's performance with a 25.3% gain. The Missouri-based company, which was the No. 4 performer in the S&P 500 index, saw its stock climb to $51.88 at the end of the month after it raised on Oct. 28 its full-year EPS guidance.

Shares of Mohawk Industries Inc. rose 15.6% in October. The flooring manufacturer on Oct. 24 posted third-quarter adjusted diluted EPS that beat analysts' estimates.

Auto components and parts supplier BorgWarner Inc., which recorded an increase of 13.6% during the month, on Oct. 31 reported earnings that were above Street expectations.

Las Vegas-based casino operator Wynn Resorts Ltd. posted a gain of 11.6% as its shares rose steadily throughout the month.

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Toymaker Hasbro Inc. was the consumer discretionary company with the highest loss at 17.4%, recording the fourth-worst performance in the overall S&P 500 index. Shares of the Rhode Island-based manufacturer dropped more than 15% on Oct. 22 after reporting adjusted diluted EPS for the third quarter that missed estimates. Chairman and CEO Brian Goldner attributed the performance to the trade war between China and the U.S., which led to higher costs for the company.

L Brands Inc. recorded a loss of 13% during the month, making it the ninth-worst performer of the entire index. The parent of the struggling Victoria's Secret brand was downgraded on Oct. 18 by Credit Suisse to underperform from neutral, adding that L Brands' stock could still trade lower unless the company gives "more concrete signs of progress" at its lingerie brand, according to Bloomberg News.

Yum! Brands Inc., whose shares dropped 10.3% during the month, on Oct. 30 reported third-quarter earnings that were below Street estimates. Shares of the KFC and Taco Bell operator declined nearly 8% on Oct. 30 after the earnings announcement.

E-commerce company eBay Inc. recorded a loss of 9.6% in October. This is the second consecutive month that the online marketplace operator was listed as one of the worst performers of the consumer discretionary sector. EBay shares fell to $35.62 on Oct. 24 despite it reporting earnings that surpassed analysts' estimates.

Fast-food giant McDonald's Corp. posted a negative return of 8.4%. Shares of McDonald's closed at $199.27 on Oct. 22, down from the Oct. 21 closing price of $209.85, following the company's announcement that diluted EPS for the third quarter that fell short of expectations.